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Wilma Company must decide whether to make or buy some of its components. The costs of producing 62,600 switches for its generators are as follows.
Wilma Company must decide whether to make or buy some of its components. The costs of producing 62,600 switches for its generators are as follows. Direct materials $29,000 Variable overhead $44,400 Direct labor $28,644 Fixed overhead $82,000 Instead of making the switches at an average cost of $2.94 ($184,044 = 62,600), the company has an opportunity to buy the switches at $2.69 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Would your answer be different if the released productive capacity will generate additional income of $50,160? (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Total Cost $ $ Opportunity cost Total cost the answer is The analysis shows that net income will be by $ Save for later Attempts: 0 of 1 used Submit
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